I think you need to go through this:

http://msevents.microsoft.com/CUI/WebCastEventDetails.aspx?EventID=1032281662&EventCategory=5&culture=en-US&CountryCode=US

Please let me know if you need anything more.

Thanks,

Thanks Ola. You are correct .. I have all databases in 70 mode. Let me see what I can do.

Can we change the compatibility mode to 80? any risks?

Thanks again...

Yes, Ian is correct. I faced the same issue related to backups.